Bonds Flashcards
0
Q
Weather the bond is issued at a premium or discount or at par, the interest payable (in cash) is calculated the same way:
A
Face value (principal) of the bonds times coupon (contractual interest rate).
1
Q
The market price of a bond issues at a premium is equal to the present value of its principal amount and-
A
The present value of all future interest payments, at the market(effective) interest rate.
2
Q
If electing fair value option for valuing bonds payable
A
The fair value of the bond and the principle obligation value must be disclosed
